Samsung Warns of Slow Growth Ahead

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Dylan McGrath, EE Times, Nov. 02, 2018 – 

SAN FRANCISCO – Samsung Electronics said that it would cut its semiconductor capital spending slightly and warned that the memory market is headed for a seasonal slowdown after two years of spectacular growth.

Samsung said that it would cut its 2018 semiconductor capex to about 24.9 trillion won (about $22.6 billion), a decline of about 9% from last year's total of 27.3 trillion won. Factoring in exchange rate fluctuations, in U.S. dollar terms, the 2018 target represents a decline of just 7% from Samsung's aggressive 2017 spending level, according to Bill McClean, president of market research firm IC Insights.

Despite slowing price growth for DRAM and NAND flash memory chips over the past few months, "Samsung is barley taking its foot off the gas pedal for semiconductor capital spending," said McClean. While third-quarter spending declined about 29% compared to the second quarter, the company plans to spend about $6.2 billion on semiconductor capex in the fourth quarter, an increase of 55% compared to the third quarter.

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